eBrandz Blog

The US steps up efforts to protect online consumer privacy

The US has been pressing hard for a stringent privacy bill of rights, which would allow consumers greater control over what kind of personal data is gathered online and what sort of limits would or should be placed on it. The agreement reached in this regard covers all of the major advertising alliance’s members, such as AOL, Time Warner, NBCUniversal, Google, and Yahoo.

Both Web-based advertising and technology industries, under pressure to ensure user privacy, reacted that they would back a ‘Do Not Track’ mechanism to be adopted by browser vendors uniformly and clearly, letting consumers opt out of having certain companies, keep their online activities data.  This apparent compromise of the industry on a DNT mechanism can be attributed to persisting negotiations among the Federal Trade Commission members, who called for it in its initial privacy report.

The digital privacy issue, in particular the way of collecting users’ data online and then employing it to show them ads tailored to their ‘needs’ and ‘tastes’ (their online behavior), has been an ongoing one. The announcement was the Obama administration’s first major digital initiative since the Stop Online Piracy Act (SOPA), the antipiracy legislation, which received angry reactions from the tech industry, and then dropped.

While the authorities have pushed for agreement to limit certain types of personal data collection, consumers would still hardly be invisible online. According to digital media experts, ‘Do Not Track’ is just a misnomer. A trade group of the ad industry, Advertising Alliance, terms consumer behavior vital to its business. Its representative states: “This (agreement) is stopping some user data collection, but not stopping all of it.”

The recent developments represent the effort to assuage consumer privacy concerns even while not hurting the online advertising growth, important to media & publishing firms as well as the entire advertising industry. The Interactive Advertising Bureau figures show digital ad revenues in the US were around $7.88 billion for the 3rd quarter of 2011, a good 22% rise over the corresponding period in 2010.

Methods to opt out of custom advertising until now varied on basis of a user’s browser privacy settings or whether one happened to click on the blue triangle icons placed in the corners of some ads. Under the new methodology, browser vendors will create an option into the settings. When selected, it will send a signal to data collecting agencies that a visitor doesn’t want to be tracked.

Third-party sites, networks that collect and employ data for serving user-specific advertising, like Advertising.com (owned by AOL); DoubleClick (owned by Google); and a host of other ad networks would now be restricted in the personal data that they can gather on users if the latter opt for a ‘Do Not Track’ option. They would be confined to using data only for market research/ analytics but could not make detailed user profiles or display them customized ads.